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Oil Prices Drop Ever Further

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October 24, 2008

According to Reuters, reporting from Vienna, an emergency OPEC meeting today concluded with a quick decision to cut oil production by 1.5 million barrels per day in an attempt to stop oil prices from skidding uncontrollably to even lower levels. Automotive News points out that the price of a barrel of oil has sunk by nearly 60 percent after a reaching record highs of $147.27 in July.

As of today, prices have fallen yet again to land at $63 per barrel. And here in the United States, where we consume more energy than any other country in the world, market spasms and record instability in oil prices have proven to be popular presidential campaign issues. Of course, both sides claim they have the solution. We hope that whomever lands at the helm on November 5 will continue the drive for the U.S. energy independence, and we hope that regardless of oil prices automakers will continue to offer vehicles that consume far less fuel and continue R&D on vehicles that do not use fossil fuels at all.

More efficient cars in America won't--and shouldn't--happen overnight, but progress in this area has been the slowest in the United States, and not for lack of American ingenuity. Rather, market demand for more features and performance mixed with (some claim) artificially cheap gasoline and automakers' shortsighted focus on high profit margins has led to a surplus of thirsty, powerful models left languishing on dealers lots. Suddenly lean, efficient models across the street like Honda's Fit, Scion's xD, and Toyota's Prius are looking quite appealing to a host of American buyers.

We've seen gas supplies and prices spike before, and yet every time we've gradually returned to our V-8s, high curb weights, and rolling office/entertainment/movie theaters. Are gas prices, far lower in America than the rest of the world (try almost $10-per-gallon equivalent in London), part of our right as American drivers, or are they simply prolonging our addiction to lower-tech, high-consumption vehicles?--Colin Mathews